A better-than-expected uptick in the UK services PMI was not enough to give the Pound Sterling to US Dollar (GBP/USD) exchange rate a boost.

Even though the service sector demonstrated robust growth in August, increasing the odds of a solid third quarter gross domestic product reading, the mood towards Pound Sterling (GBP) remained bearish.

Lingering uncertainties surrounding Brexit, and the future of Theresa May’s Chequers plan, kept GBP exchange rates under pressure, with the odds of a no-deal Brexit still looking uncomfortably high.

Nevertheless, the positive showing from the services PMI bodes well for the underlying health of the UK economy.

As Chris Williamson, Chief Business Economist at IHS Markit, commented:

‘Faster service sector growth comes as much-needed welcome news after disappointing manufacturing and construction PMI surveys in August. The survey data indicate that the economy is on course to expand by 0.4% in the third quarter, a relatively robust and resilient rate of expansion that will no doubt draw some sighs of relief at the Bank of England after the rate hike earlier in the month.’